Holden Graham started The Graham Co., a new business that began operations on May 1. The Graham Co. completed the following transactions during its first month of operations. May 1 H. Graham invested $41,000 cash in the company in exchange for its common stock. 1 The company rented a furnished office and paid $2,400 cash for May's rent. 3 The company purchased $1,910 of office equipment on credit. 5 The company paid $720 cash for this month's cleaning services. 8 The company provided consulting services for a client and immediately collected $5,600 cash. 12 The company provided $2,500 of consulting services for a client on credit. 15 The company paid $750 cash for an assistant's salary for the first half of this month. 20 The company received $2,500 cash payment for the services provided on May 12. 22 The company provided $4,000 of consulting services on credit. 25 The company received $4,000 cash payment for the services provided on May 22. 26 The company paid $1,910 cash for the office equipment purchased on May 3. 27 The company purchased $80 of advertising in this month's (May) local paper on credit; cash payment is due June 1. 28 The company paid $750 cash for an assistant's salary for the second half of this month 30 The company paid $350 cash for this month's telephone bill. 30 The company paid $270 cash for this month's utilities, 31 The company paid $1,600 cash in dividends to the owner (sole shareholder) THE GRAHAM COMPANY Income Statement For Month Ended May 31 Revenues: Consulting services revenue $ 5,600 $ 2,400 1,450 Expenses Rent expense Salaries expense Advertising expense Cleaning expense Telephone expense Utilities expense 80 720 350 270 Total expenses Net income (loss) 5,270 5,270 $ Answer is complete but not entirely correct. THE GRAHAM COMPANY Statement of Retained Earnings For Month Ended May 31 Retained earnings, May 1 $ Add: Investments by stockholder x $ 0 41,000 X 41,000 Less: Dividends 1,600 Retained earnings, May 31 $ 39,400 THE GRAHAM COMPANY Balance Sheet May 31 Assets Liabilities Equity Total assets $ 0 Total liabilities and equity $ 0 THE GRAHAM COMPANY Statement of Cash Flows For Month Ended May 31 Cash flows from operating activities $ Cash flows from investing activities 0 Cash flows from financing activities $ 0 0 Cash balance. May 1 Cash balance. May 31 $ 0